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Florida's job engine is sputtering

The little job engine that could — the one that kept the Tampa Bay area and Florida in the top tier of economic powerhouses the past few years — has been sputtering and backfiring.

And the black smoke was especially thick last week as 200 of the state's top economic development officials gathered in Tampa to assess their uncharacteristically depleted state. The bleak news came in triplicate:

• The state has defunded and depleted its Innovation Incentive Fund, cash subsidies totaling more than $400-million that helped snag such flagship companies as bioscience researcher Scripps in Palm Beach and marine science bigwig SRI in St. Petersburg.

• Even retaining what businesses we have could be problematic. John Adams, president of Enterprise Florida, the state's top business recruitment agency, warned that we've become a "target-rich environment" for other states eager to steal away our good-paying jobs. North Carolina is one of the biggest culprits.

• Two separate benchmark studies comparing our state and region to other U.S. competitors rated us either last or close to last on criteria such as our ability to attract high-tech companies.

"Do you really want to transform? Do you really want to move forward?" said Del Boyette, a business recruitment consultant who addressed a room full of Florida economic development officials in Tampa last week.

The jobs picture reflects the turmoil. Florida lost 25,300 jobs in April, the worst performance in the nation, worse even than Michigan's. The state's unemployment rate has crept up to 4.9 percent.

The housing slump gets most of the blame, but it's no secret that recessionary fears are postponing hiring in healthier fields, as well.

The spate of mostly bad news has forced a critical reassessment from Florida's economic development officials, eager to wean the economy from its reliance on tourism and construction. More than a few visiting Tampa last week noted how the governor and Legislature rebuffed a request for tax credits for research and development companies, an incentive available in at least 40 states.

"It's a hard pill to swallow. That's a big one," said Pinellas County economic development director Mike Meidel. "Every time an R&D company comes in, they say, 'You mean we've got to pay for this? We don't even have to pay for this in Jersey.' "

Boyette compounded the pain by previewing a study commissioned by the Florida High-Tech Corridor to gauge Florida's strength in attracting cutting-edge industries. It measured the state against the likes of North Carolina, Texas and New York. Conclusion: Florida doesn't match up.

Boyette's associate Charlie Sloan said the gripe against Florida is that business recruitment is uncoordinated and inconsistent. An example was this year's divestment of the innovation fund that Gov. Jeb Bush used to such dramatic effect. In addition to St. Petersburg's SRI, which tapped $20-million of the innovation money, Tampa used $15-million to seal a deal between H. Lee Moffitt Cancer Center and drugmaker Merck.

"We have to be honest about our strengths and weaknesses, and not believe our own press releases," Sloan said during a presentation at the Tampa conference hosted by the Florida Economic Development Council.

On the same day as Sloan's criticisms, the Tampa Bay Partnership announced that the seven-county region it markets had fallen to last place on its "economic scorecard." We've fallen behind five other metro areas: Jacksonville, Atlanta, Dallas, and Raleigh-Durham and Charlotte, N.C.

Another prickly point is Florida property taxes. Recent reforms relieved homeowners but burdened business owners to the detriment of job creation, said economist Rick Harper of the University of West Florida. If we boost average wages, we won't have to worry so much about home affordability, he said.

"Technology can go anywhere — so can the workers," Harper said.

In this financially strapped year, Enterprise Florida advised counties to focus on retention and deflect the inevitable business recruitment overtures from North Carolina, South Carolina and Georgia.

Pinellas lost a big fish this year when Evatone, a media and printing company on Ulmerton Road, moved most of its 300 employees to Mocksville, N.C. The Tarheel State offered lower fees and property taxes.

One bright spot has been Florida exports. They set a record at $45-billion last year, thanks in part to a weak dollar that made Florida goods seem cheaper to foreigners.

Another geographic bright light has been Jacksonville, where recruiter Jerry Mallot, former senior vice president at the Greater Tampa Chamber of Commerce, has focused on wooing overseas investment.

Deutsche Bank has agreed to bring 1,000 jobs to the region, and Mallot said instability in places like Venezuela has created a spigot of money directed at Florida — if the state is ready to capitalize on it.

"You've got to be prepared to be lucky," Mallot said.

Florida's job engine is sputtering 05/19/08 [Last modified: Friday, May 23, 2008 10:01pm]
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